Lecture 1

Marketing is more than what it appears to be!

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Who was the first marketer?

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Antecedents of marketing
Event Timeline
First department store 1650 Mitsui family (Japan)
First newspaper ad 1657 England for coffee
First advertising agency 1869 N W Ayers and Sons
First brand name product 1870 Pear’s soap
First packaging 1880 laundry soap in England
First Marketing research department 1911 Curtis publishing company
When did Marketing Start?
“Marketing” did not exist as a term until the early 1900s.

The first Marketing textbooks were published between 1900-1910.

Some Institutional economists started to teach “distribution”, later
added “advertising” and then “promotion” and “pricing”.

The early Marketing books were written by Economists!

Early functions of Marketing
Departments

Conducting research Finding leads Prepare brochures and other

promotions

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Evolution of marketing
• Production era
• Product era
• Selling era
• Marketing era
• Holistic marketing era

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Marketing Positions in current time
• Chief Marketing Officer (CMO)
• Marketing Analysts
• Brand Managers
• Category Managers
• Market Segment Manager
• Distribution Channel Manager
• Pricing Manager
• Marketing Communication Manager
• Database Managers
• Direct Marketers
• Internet and Social Media Managers
What does CEOs think of Marketing

• 1P CEO
• 4P CEO
• STP CEO
• ME CEO
Functions of CMO
• Represent the voice of the customer
• Monitor the evolving business landscape and gather customer insight
• Be the steward of corporate brand
• Upgrade marketing technology and skills in the company
• Bring insight into the corporate portfolio and synergies
• Measure and account for marketing financial performance.
Areas of Marketing
• Commercial marketing
• Place marketing
• Person marketing
• Social marketing
• Political marketing
• Fundraising
Have you
personally
done any
marketing?
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Have you personally done any
marketing?
• Did you compete for a job where there were other candidates?
• Did you compete for a desirable apartment where there were other
applicants?
• Did you apply to a bank for a large loan and need to establish your
reliability and need?
• Did you ever propose a new project or product to your senior
management that you hoped they would accept?
• Did you propose a girl/boy?
What people don’t like about
Marketing
• Intrusion and interruption
• Exaggeration
• Deceptive practices
• Hard selling or pressure selling
• Buy now; pay later
• Planned obsolescence
• Too much choice
• Marketers get consumers to want and spend more than they can afford.
• Marketers are skilled in creating brand differentiation which should
not exist
• Marketers want to produce and sell more goods without concerning
about resources and environmental costs
• Marketers have not paid enough attention to product safety
• Marketers want to sell to public whether it is good or not to them
• Marketing promotes a materialistic mindset
Contrary views
• Marketing creates job
• Marketing has raised the standard of living
• People don’t naturally buy new things
• Social Marketing has improved many things including Polio, AIDS
Name a company that you will dearly miss if it disappears?
Characteristics of companies that
will be missed
MARKET+ING
Constituents of market
• More than one party with unmet need
• Exchange
• Potential benefit
• Potential sacrifice
• Value
What customers need?
What is a want?
What is desire?
What is demand?
Desire>Willingness to pay=Price
Marketers’ challenge!

Need Want Desire

Demand
Marketing=
How to know what customers want?
• Ask the consumers
• Take Qualitative survey
• Review websites
• Complaints websites
• Online forum
• Track their behaviour
• Choice models-Binomial and Multinomial
• Consumer Experiment
• Conjoint analysis
What affects students’ perception?
• +(Placement)++
 Variables Unit of measurement

Placement 1=Highly dissatisfied; 7=Highly satisfied

Accommodation 1=Highly dissatisfied; 7=Highly satisfied

Academic 1=Highly dissatisfied; 7=Highly satisfied

Location 1=West Bengal, 2=Outside West Bengal

Infrastructure 1=Highly dissatisfied; 7=Highly satisfied
Campus_life 1=Highly dissatisfied; 7=Highly satisfied
Perception 1=Highly dissatisfied; 7=Highly satisfied
Results of MLR
Coefficients Estimate Estimated std. error t value Pr (.|t|)
(Intercept) 0.65305 0.35874 1.820 0.0689
Placement 0.60133 0.03559 16.894 2e-16 ***
Accommodation 0.07858 0.04373 1.797 0.0726*
Academic -0.04413 0.04183 -1.055 0.2916
Location -0.21797 0.18843 1.157 0.0476**
Infrastructure 0.03018 0.03958 0.762 0.4459
Campus_life 0.02422 0.03801 0.637 0.5242

Residual standard error: 1.359 on 1294 degrees of freedom Multiple R-squared: 0.3347, Adjusted R-squared:
0.3316 F-statistic: 108.5 on 6 and 1294 DF, p-value: < 2.2e-16
What should marketers sell to
satisfy your need?
• Physiological need
• Safety need
• Social need
• Esteem need
• Self actualisation need
Five types of need
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not
initial price, is low.)
3. Unstated needs (The customer expects good service from the
dealer.)
4. Delight needs (The customer would like the dealer to include an
onboard GPS navigation system.)
5. Secret needs (The customer wants friends to see him or her as a
savvy consumer.)
Customer value
• Buyers wants to maximise (Value-Price)
• Seller wants to maximise profit

• Therefore, the key is to provide highest value at the lowest cost and
right price
Customer Perceived Value
•Value Proposition: Create a Product
People will Actually Buy
Value Prop Statement
• For (target customer segments)
• Dissatisfied with (existing solutions)
• Due to (key unmet needs)
• (Venture name) offers a (product category)
• That provides (key benefits of your solution)
Marketing Journey

Communicate Maintain
Explore Value Create Value Deliver Value
Value Value
Segmentation
Need for segmentation
Is middle path a feasible solution?
Bases for segmenting consumer
markets
Demographic segmentation
Gender-female
Psychographic segmentation
Behavioural segmentation
User and usage related variables
Criteria for good segments
Consumer Behaviour
• Consumer behavior is the study of how individuals, groups, and
organizations select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants
What Influences Purple: Rymbolic of royalty in most of the Western cultures. On the
contrary, the purple colour is symbolic of mourning in Brazil and
Consumer Thailand
Behaviour? Green: In Asian cultures, green stands for new and eternal life, new
beginnings, fertility, youth, health, and prosperity. In Muslim countries,
green colour is symbolic of their religious identity. If a man wears a
green colored hat in China, it suggests that the man’s wife is cheating
on him.
White: While in West it is symbolic of purity, elegance, peace, and
cleanliness; in Asian countries such as India, it stands for death and
mourning.
Black: While Black may be symbolic of formal attire and sophistication
in West, it is also signifier of death, evil, mourning, black magic, and
mystery within the same culture. In the Middle East, black is symbolic
Red: Romantic, angry, alarming of both rebirth as well as mourning. In Africa, it symbolizes age,
Yellow: Energetic, happiness, danger maturity, and masculinity.
Blue: Calm, corporate, safe Red: The most symbolic and powerful of all, the Red colour in India
White: Clean, simple, pure stands for fear and fire, wealth and power, purity, fertility, seduction,
Black: Prestigious, intimidating, powerfullove, and beauty. In South Africa, red is associated with mourning and
Orange: Delightful, fun, happiness the section of red in the country’s flag symbolizes violence and
sacrifices that were made during the struggle for independence.
The Consumer Decision Process

Need Information Alternative

Purchase Post purchase
recognition search evaluation
Need Recognition
Royalty-Free/CORBIS
Functional needs

©Digital Vision/PunchStock
Psychological needs
Need recognition
• Internal Stimuli
• External Stimuli

• Marketers job: Identify the circumstances that trigger a particular

need and develop marketing strategies that spark consumer interest.
Information search
• Information Sources:
• Primary: Family, friends, neighbours, acquaintances
• Commercial. Advertising, Web sites, salespersons, dealers, packaging,
displays
• Public. Mass media, consumer-rating organizations
• Experiential. Handling, examining, using the product
Search dynamics

Marketers job: Marketers need to identify the hierarchy of attributes that guide consumer decision making.
Must strategize to get its brand into the prospect’s awareness, consideration, and choice sets. The company must
also identify the other brands in the consumer’s choice set so that it can plan the appropriate competitive appeals.
In addition, marketers should identify the consumer’s information sources and evaluate their relative importance.
Asking consumers how they first heard about the brand, what information came later, and the relative importance
of the different sources will help the company prepare effective communications for the target market.
Evaluation of alternatives

Attribute Weight Ideal Iphone Samsung Vivo Asus Oppo

Design 20 5 5 3 3 2 3
Price 30 5 2 4 4 3 3
Processor 10 5 5 3 2 3 2
Memory 20 5 5 2 3 3 3
Camera 20 5 5 2 3 2 4
100 500 410 290 320 260 310

What should marketer of Samsung, Asus and Oppo do?

• Redesign the mobile-Real repositioning
• Alter the beliefs about brand-Psychological repositioning
• Alter belief’s about competitors brand- Competitive depositioning
• Alter the importance of weight
• Call attention to neglected attributes
• Shift the buyer’s ideal
Purchase decision
• Product choice
• Brand choice
• Dealer choice
• Quantity choice
• Timing
• Payment method
Consumer’s decision to modify, postpone, or avoid a purchase decision
is heavily influenced by one or more types of perceived risk
• Functional risk
• Physical risk
• Financial risk
• Social risk
• Psychological risk
• Time risk
Post-purchase Behaviour
Customer Satisfaction

Undesirable
Consumer Dissonance
Behavior

Customer Loyalty
Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption
Adopter Categorization
• Innovators: Technology enthusiastic
• Early adopters: opinion leaders
• Early majority: adopts the technology when its benefits are proven
• Late majority: skeptical conservatives who are risk averse, technology
shy and price sensitive
• Laggards: tradition bound and resist innovation.
Sales and Product Life Cycle

Product life cycle Adoption of innovation

Strategies Based on
the Product Life Cycle: Some Caveats
Bell shaped, but can take many
shapes.

Challenging to know precisely

the stage of the PLC.
Introduction stage..
• Features:
a) Low sales growth
b) Low or negative profits.
c) Heavy promotional expenditures.
Firm’s strategies:
d) Inform potential consumers
e) Induce product trial
f) Secure distribution in retail outlet
g) Prices tend to be high due to high costs
Growth stage..
• Rapid climb in sales.
• Early adopters like the product and additional consumers start buying it
• New competitors enter with new product, new features, expand distribution.
• Prices remain where they are or fall slightly
• Companies maintain their promotional expenditures at the same level or increases to match the
competition
• Profits increases due to increased volume and reduced manufacturing cost and lesser per unit
cost for promotion.
Strategies for Sustaining
Rapid Market Growth
• Improve product quality, add new features, and improve styling
• Add new models and
• Enter new market segments
• Increase distribution coverage
• Shift from product-awareness advertising to product-preference
advertising
• Lower prices to attract the next layer of price-sensitive buyers
Maturity stage..
• Rate of sales growth will slow down
• Normally lasts longer than previous stages.
• The issue in front of a marketing manager is whether to struggle to become one
of the big three and achieve profits through high volume and low costs, or to
pursue a niching strategy and achieve profits through low volume and high
margin.
Marketing Product Modifications
• Quality improvements
• Feature improvements
• Style improvements
Ways to Increase Sales Volume
• Convert nonusers
• Enter new market segments
• Attract competitors’ customers
• Have consumers use the product on more occasions
• Have consumers use more of the product on each occasion
• Have consumers use the product in new ways
A Product in Decline
Reason for decline..
• Technological advances
• Shifts in consumer tastes
• Increased domestic and foreign competition
Strategies:
Some firms withdraw from the market.
Those remaining may reduce the number of products they offer.
May withdraw from the smaller market segments, weaker trade channels, cut promotion budget
and may reduce the prices further.